NEW YORK - As he was being evacuated from the New York Board of Trade's headquarters in 4 World Trade Center the morning of Sept. 11, President and CEO Mark D. Fichtel grabbed his suit jacket, his briefcase and a few papers, expecting to return in a couple of days.
Mr. Fichtel finally got back to lower Manhattan on Sept. 30. He stood a few blocks away from ground zero, behind the police barricades that keep gawkers away from the smoldering remains of the World Trade Center. Now the New York Board of Trade's 13 trading pits and Mr. Fichtel's eighth-floor corner office lie under thousands of tons of rubble. There is no timeline for returning.
Instead, Mr. Fichtel and the 1,500 Board of Trade members and 260 employees commute to Long Island City in Queens. There, they trade futures and options on the Russell 1000 and NYSE Composite indexes as well as commodities and currencies from a backup facility located in an old industrial neighborhood.
Their building, owned by workspace and technology supplier Comdisco Inc., looks to be less than a decade old. But it is an anomaly dropped into this gritty neighborhood, separated from the Financial District not just by miles and the East River, but by an economic gulf.
Across the street from NYBOT's temporary home is a cab dispatch yard surrounded by a rusty chain link fence topped with razor wire. Nearby are old warehouses covered with graffiti. On a particularly dingy building on the southwest corner of 23rd Street and 43rd Avenue, a sign advertises "industrial space available." Sleepy neighborhood restaurants and convenience stores suddenly have found themselves packed morning, noon and night with traders looking for a quick meal and a bottle of water. Almost directly overhead, the red train cars of the No. 7 subway line rumble out to Flushing and back to Manhattan, their horns occasionally blowing as they round a curve. On 23rd Street, there are signs that read "no dumping" and threatening fines of up to $20,000.
But it doesn't pay to be picky in times like these. In fact, had the NYBOT not secured this backup space five years ago following the 1993 bombing of the World Trade Center, and tested it annually, the exchange might still be shut down and competitors, such as the London International Financial Futures and Options Exchange, would be taking its customers, Mr. Fichtel said.
Backup since 1996
Since 1996, NYBOT has paid $300,000 a year to lease the space from Comdisco and test it as a backup facility. In the past, people inside and outside the exchange questioned the expense, said NYBOT spokesman Guy Taylor. Now, other U.S. exchanges are calling and asking NYBOT for advice in drawing up contingency plans that include leasing backup space.
Mr. Fichtel said the Board of Trade likely will work out of this temporary building for another six months. NYBOT is discussing with the New York Mercantile Exchange the possibility of the Board of Trade moving into the NYMEX building in the World Financial Center.
Even if the two exchanges can agree to live together, the arrangement will still be temporary at best because with the both in the same building, neither would have room to expand.
"Something would have to be done," Mr. Fichtel said. "We would need some additional space to allow for growth."
At this point, just about anything would be an improvement. The Board of Trade is operating with just two trading pits. Traders used to four-and-a-half to five-hour sessions in the old pits now make all their trades in 90 minutes so each of the commodities can rotate through the pits during the trading day.
Traders used to monitoring sophisticated trading systems now look at green monochrome screens for price information. Futures and options settlement prices are posted on giant dry erase boards at one end of the improvised trading floor, which is nothing more than a large room with columns, blue indoor-outdoor carpet and 15-foot ceilings. Hand-written cardboard signs identify the clearing room and the financial futures exchange area, which consist of old desks and cubicles and metal folding chairs. Financial futures contracts now trade in a back room next to people sitting on the floor eating lunch.
Mr. Taylor said every time he enters the building, there's another technical improvement. In the first week of operation, trading firms had only one phone line each to use to communicate with customers. NYBOT hastily arranged to buy a few dozen cellular phones and allowed traders to use them on the trading floor, something that's not normally allowed. A few days later, after Mayor Rudolph W. Giuliani "pushed some buttons," in Mr. Taylor's words, Verizon Communications Inc. installed up to six phone lines for each trading firm.
Perhaps surprisingly, these technical setbacks have not meant a reduction in trading volume. Quite the opposite, in fact. With all 13 trading pits and during a full trading day for all the commodities, the NYBOT used to average 80,000 contracts per day. Since it's been in the temporary facility, the NYBOT is averaging 140,000 contracts per day, nearly double the old volume.
Mr. Taylor said this might be partly due to the reduced number of trading hours. Traders are frantic during the 90 minutes they do have, he said.
For all the chaos, the move has fostered a sense of togetherness, he said. The sometimes fractious NYBOT members have not complained about the site's technology shortcomings, the neighborhood, the commute or the uncertainty the future holds.
"All the members have been spectacular," Mr. Taylor said.
However some rumors began circulating in recent days, and NYBOT officials felt they were serious enough to address them in a letter from Chairman Charles H. Falk. Among the rumors were that NYBOT staff members were taking limousines to work and getting three meals a day provided to them, that the cost of readying the space in the backup facility was $6 million and that NYBOT was paying for parking for some members.
"It is most troubling to hear some of the stories being circulated, all of which are untrue at best and malevolent at worst," Mr. Falk wrote. "Sadly, these stories only undermine staff's morale and ability to accomplish what they need to for the benefit of the members."